Spain banking sector, 4th in EU’s financial support; UK is first

The reorganisation of Spain banking sector has been in the eye of the storm for last three years because it started later than the rest of counterparts in Europe, and could not avoid the bail-out to be recapitalised. However, Spanish banks are not the ones that have received more state financial support since 2008 credit crunch.

Spain ranks fourth in the list of EU countries giving more public aid to their financial entities since the crisis began, with a total amount of €60.000 millions, including the banking rescue. Only United Kingdom (€82.000 millions), Germany (€64.000 millions) and Ireland (€63.000) are situated ahead.

These four countries represent 50% of overall European financial support to its banking industry. Between 2008 and 2012, EU member states have recapitalised their entities by €591,900 millions, a figure equivalent to 4.6% of regional GDP.

The national brands given more public funds during the crisis are British Royal Bank of Scotland (€ 46.000 millions), Irish AIB (€32 millions) and Spanish Bankia (€ 22.000 millions).

Beyond recapitalisations, European governments have granted their banks guarantees to make them easier the access to financing. In 2012 there were €543,500 millions of public guarantees still pending, which means 4.14% of GDP against the maximum of €906,000 millions in 2009, implying a 7.78% of GDP. Nevertheless, only guarantees valued at €2.000 million have been enforced by now.

These four countries represent 50% of overall European financial support to its banking industry. Between 2008 and 2012, EU member states have recapitalised their entities by €591,9 billions, a figure equivalent to 4.6% of regional GDP.

The national brands given more public funds during the crisis are British Royal Bank of Scotland (€46 billion), Irish AIB (€32 billion) and Spanish Bankia (€22 billion).

In last five years, the European Comission has analised the reorganisation of 68 banks, of which 25 have been forced to be liquidated. These figures mean a fourth part of European banking sector’s assets. Brussels still has unresolved about 25 cases, especially of rescued countries.

At the close of year 2012, member states received total gains amounting to €125.000 millions in return for their financial support to banks, of which €33.000 million come from charges for guarantees.

About the Author

Julia Pastor has a broadly experience in business writing for Consejeros Media Group at Consejeros, Consenso del Mercado and The Corner. Previously, she worked for the financial news agency GBA and contributed to El País Business. She holds a Master in Financial Journalism and a degree in English from the Complutense University in Madrid.